Russian ex-minister Ulyukayev jailed for eight years over $2 million bribe

MOSCOW (Reuters) - Former Russian economy minister Alexei Ulyukayev was found guilty of soliciting a $2 million bribe and sentenced to eight years in jail on Friday, in a case that has shone a rare light on infighting among the elite ahead of a presidential election.

Ulyukayev, the most senior serving official to be arrested in decades, was found guilty of accepting the bribe last year from Rosneft (ROSN.MM) chief executive Igor Sechin, a close ally of President Vladimir Putin.

Sechin took part in an elaborate sting operation on Nov. 14 2016 involving Russia’s FSB security service which ended in the arrest of Ulyukayev, 61, the latest twist in what several sources said was a Kremlin turf war.

“People have ambitions and they are fighting over them,” said one senior source who knows several of the people involved in the case.

Ulyukayev, who denied the charges, said he’d been set up. He said he thought the bag with the bribe was a gift of expensive alcohol. He said he would appeal and a source close to Ulyukayev said his lawyers hoped Putin might pardon him if that failed.

The case’s denouement comes just months before a March presidential election which incumbent Putin is expected to win. If, as expected, he is re-elected he will be 71 at the end of his new term and is barred by the constitution from running for a third consecutive term.

With that deadline looming, turf wars take on extra importance because they could help decide who runs Russia

after Putin.

The verdict and the harsher-than-expected sentence -- Ulyukayev was widely forecast to get a suspended sentence -- is likely to be interpreted as a sign that Sechin’s place at Putin’s side is safe and that he is increasingly influential, something that has alarmed other members of the elite.

“We’re dealing with a court that has been hijacked by personal interests,” Gleb Pavlovsky, an ex-Putin adviser, wrote on social media.

Slideshow (10 Images)

TURF WAR

State prosecutors had said that Ulyukayev had asked for the bribe in exchange for approving the sale of the state-controlled oil company Bashneft (BANE.MM) to Rosneft, something he initially opposed.

Boris Neporozhniy, a state prosecutor, hailed Friday’s verdict as a sign of “the supremacy of the law,” while a spokesman for Rosneft, the oil firm Sechin runs, said Ulyukayev had been caught “red-handed” and that the evidence against him had been rock solid.

Before his arrest, Ulyukayev had been one of the leading figures in a faction of economic liberals who argued for less state control over the economy.

Sechin is widely seen as the main champion of the opposite view, that the state should consolidate its grip, particularly over the energy sector that provides a large share of Russia’s state revenue through its two biggest companies, Rosneft and Gazprom. He is backed by others, many of them with a background in state security, who share his view.

Two sources said the way Ulyukayev’s trial had been conducted showed that his rivals for influence in the ruling elite had used the trial to try to push back against him.

They did that by lobbying officials for the trial to be held in public, and by leaking elements of the prosecution case to the media, the two sources said. Sechin has publicly opposed the court’s decision to release audio tapes of the sting operation.

The fact that the trial has been held in public and not behind closed doors showed the limits of Sechin’s influence, the sources said.

Ulyukayev, who was handcuffed and placed in a courtroom cage after the verdict, looked shocked and said he had been treated unfairly. “Of course it’s unjust,” he told reporters. When one reporter pointed out he’d received the minimum custodial sentence for the charges, Ulyukayev held up his handcuffed hands and said: “You call this the minimum?”

When asked about the case on Friday, Kremlin spokesman Dmitry Peskov declined to comment.

Former Russian finance minister Alexei Kudrin, an adviser to Putin and a strong advocate of less state control over the economy, strongly criticised the verdict.

“It’s a terrible, groundless verdict,” Kudrin said on social media. “It’s weak work by the investigation... Many face such injustice these days.”